“It’s all ready. A fourth and fifth nuclear test and a rocket launch could be conducted soon, possibly this year,” the source said, adding that the fourth nuclear test would be much larger than the third, at an equivalent of 10 kilotons of TNT.

The tests will be undertaken, the source said, unless Washington holds talks with North Korea and abandons its policy of what Pyongyang sees as attempts at regime change.

North Korea worked to ready its nuclear test site, about 100 km (60 miles) from its border withChina, throughout last year, according to commercially available satellite imagery. The images show that it may have already prepared for at least one more test, beyond Tuesday’s subterranean explosion.

“Based on satellite imagery that showed there were the same activities in two tunnels, they have one tunnel left after the latest test,” said Kune Y. Suh, a nuclear engineering professor at Seoul National University in South Korea.

Washington, Seoul and Tokyo are anxious to see China change its North Korean policy. Since Pyongyang’s nuclear test has damaged China’s interests, it’s necessary for China to give Pyongyang a certain “punishment.” The key problem is what the extent of this punishment should be.

Beijing should punish Pyongyang, but should also try to avoid being the focus of North Korean and global public opinion. The reduction in China’s assistance to North Korea shouldn’t be more prominent than the increase in sanctions by the US, Japan and South Korea. This should be the bottom line for China to participate in international sanctions against North Korea.

The Korean Peninsula has remained in a Cold War state. The West tends to perceive the North Korea issue from an ideological perspective, and the US has its own strategic considerations on the peninsula. The nuclear issue has become a time bomb. Both North Korea and the US, Japan and South Korea should take the blame for this. It’s unreasonable if Washington, Tokyo and Seoul don’t make any changes but demand that China change its attitude toward North Korea.
China should stick to being a mediator in the nuclear issue, and not join any side to confront the other. It’s possible that tensions on the peninsula will further escalate and a war could break out. China should prepare itself for any extreme situations, which is important for it to safeguard its security and not be held hostage by either side.

At home and abroad, China has long been regarded as North Korea’s best friend, but at home that sense of fraternity appears to be souring as ordinary people express anxiety about possible fallout from the test last Tuesday. The fact that North Korea detonated the device on a special Chinese holiday did not sit well, either.

Among Chinese officials, the mood toward the young North Korean leader, Kim Jong-un, has also darkened. The Chinese government is reported by analysts to be wrestling with what to do about a man who, in power for a little more than a year, thumbed his nose at China by ignoring its appeals not to conduct the country’s third nuclear test, and who shows no gratitude for China’s largess as the main supplier of oil and food.

“The public does not want China to be the only friend of an evil regime, and we’re not even recognized by North Korea as a friend,” said Jin Qiangyi, director of the Center for North and South Korea Studies at Yanbian University in Yanji City. “For the first time the Chinese government has felt the pressure of public opinion not to be too friendly with North Korea.”

Other experts suggested the test could worsen relations between the North and China and urged China’s new leadership to consider taking a tougher stance to curb the North’s nuclear weapons program, which appears to be advancing after some early technical difficulties.

[…] Despite crippling sanctions related to the North’s missile and nuclear programs, some of which China has agreed to enforce as a member of the UN Security Council, bilateral trade between the two has increased to a record high of $6.03 billion – twelve times the 2000 total.

Much of this growth has been driven by natural resources, with China remaining the North’s main source of oil, while the North’s primary export to China is minerals, especially iron ore. The North has also begun upgrading its poor information and communication infrastructure, with computer and component imports from China growing an average of 61% per year between 2005 and 2010.

However, there is also a significant consumer aspect that cannot be measured because much of it derives from the underground trade in everything from Chinese electronics and clothes to bootleg copies of movies and tv shows. This trade continues to thrive, despite reported border closures and increased security.

Still, while some analysts saw the most recent nuclear test as a possible breaking point for the Chinese, initial statements point to continuation rather than reexamination of their approach, at least for the time being. China has continued to expand trade with North Korea largely for strategic reasons, and despite the poor investment climate and provocations, the benefits still outweigh the costs. Some of this is based on geopolitical considerations. The most oft-heard argument is that North Korea acts as a buffer state between China and the US-allied South, but this is perhaps a bit overstated. The simpler geopolitical reason remains that, mercurial and unpredictable as it is, North Korea remains China’s only ally in the region, and is not to be discarded easily.

Fuel, rice, wheat and basic consumer goods all flow legally, usually by lorry over bridges on the Yalu, into North Korea. Imports from the North include minerals, coal, scrap metal and seafood. There is also a thriving black-market trade both ways, usually by boat. This feeds the growing demand for other non-staple products among the new North Koreannouveaux riches. Border police, especially in the North, are known to take bribes to allow illicit trade to pass. One illegal North Korean export causing social problems is crystal meth, a drug known in China as bingdu, or “ice”. If China’s government clamps down on official trade with the North to express its displeasure at the nuclear test, the result will only be more smuggling, says a local who has invested in North Korean minerals. Illicit trade brings its own problems. North Korean border guards shot dead three Chinese smugglers in 2010, and tensions remain.

Meanwhile, as goods flow into North Korea, people continue to flow out. Some come legally to work in North Korean restaurants in Dandong and will return home. Outwardly they are unswervingly loyal—“China is all right, but North Korea is better,” says one—but local Chinese say they are more confident and chatty than before. Many more flee illegally across the river and live in secret in China or try to make it to South Korea, often through a third country. Tesco, a British supermarket chain, has a store in Dandong with a special section offering “Korean food”—mainly imported from South Korea—that an employee says specifically caters to North Koreans.

Wealthy tourists from elsewhere in China pay for boat rides on the river or can even book a trip into North Korea itself, perhaps to remind themselves how far China has come. Others buy cigarettes and trinkets labelled as North Korean but, according to locals, actually made in China. There is sympathy for North Koreans, but no-one wants to miss a good business opportunity.